National Debt: Politicians Spending Addiction

Yawn.  That's the reaction of most Americans when anyone raises the issue of the country's rotund national debt.  The size of the debt--$23.1 trillion--should concern every American.  Instead people figure it's the federal government's problem.  Not their worry.  They are sadly mistaken or misled.

Quantifying the national debt can be reduced to a few key numbers.  America's debt equals $179,695 for every household in the country.  The federal government carries 46% more debt than the combined debt of every household in America.  The debt is 107% of the U.S. economy.

Even those sobering figures fall short of calibrating the size of the debt.  Consider that in the last 19 years the government has racked up more debt than than in the previous 100 years.  Since 2000, the U.S. has amassed $17.5 trillion in new debt as a result of spending more than its revenues.

The federal government's record spending binge threatens the financial health of the country, which ultimately impacts businesses, jobs and wages.  The budget for fiscal year 2020 is $4.7 trillion, a colossal 164% increase in spending since 2000. Politicians of both parties are complicit.

Federal government revenues are rising too, but at a slower pace.  The federal government estimates it will receive $3.64 trillion in revenue, the lion's share to be paid by individual taxpayers like you.  In 2000, $2.03 trillion flowed into the U.S. Treasury.  America doesn't have a revenue problem.

In 2020, the deficit or revenue shortfall will climb to $1.01 trillion by the time the government fiscal year ends September 30.  Since the end of the Clinton Administration, each Congress and president has overspent.  This trend is unsustainable without major changes in expenditures

It helps to understand what is driving government spending.  In the current budget, six out of every 10 dollars goes to mandatory spending, which includes programs such as Medicare, Medicaid, Social Security, food stamps, federal pensions, Obamacare and veterans programs.

Mandatory spending has automatic increases built in as more people are added to the rolls. Increases in benefits are baked into the budget too.  To put this in perspective, in 1968, three years after Medicare and Medicaid were created, mandatory spending represented just 27% of the budget.

For fiscal 2020, here is a breakdown of the budget for the top three mandatory spending programs: Social Security, $1.1 trillion; Medicare, $679 billion; and Medicaid, $418 billion.  Total mandatory expenditures are budgeted at $2.841 trillion.

This spending category is called mandatory because these programs have been mandated by law to be funded.  This rigid requirement leaves little room for so-called discretionary spending, which amounts to 13.3% of the current budget.  The national defense consumes 12.4% of spending.

The remaining 11.7% of the budget is devoted to paying interest on the debt.  Nearly $480 billion is included in the 2020 budget to service the interest.  There is no room in the budget to actually pay down the debt or principle.  Each year the interest gobbles up a greater percentage of the budget.

Congress has no incentive to reign in spending.  Representatives and senators use the budget as personal piggy banks to fund pet projects in their districts.  That doesn't mean the expenditures are all wasteful, but lawmakers view the projects as little more than a downpayment on their reelection. 

If Congress actually followed its own rules of producing a national budget, there would be more scrutiny of these expenditures.  But lawmakers have failed to pass an annual budget in seven of the last 15 fiscal years, instead using what's known as continuing resolutions to fund the government.

These temporary funding resolutions usually cover six months or less leaving little incentive for  a substantial spending debate.  These resolutions are the product of eleventh hour, horse-trading sessions designed to win both parties' votes and avoid political blame for a government shutdown.

Most senators and representatives, if they are honest, will admit there is too little time for members to even read what is included in the spending resolution.  They are essentially blindly rubber stamping a budget that has been engineered by a handful of members behind closed doors.

This cannot continue if Americans want accountability from their government.  Congress needs to return to the budget process where spending, the debt and specific programs are reviewed, debated, prioritized and voted on.  Congress has no greater duty than to establish the federal budget.

Unfortunately, there is only the dimmest hope this will ever happen.  A divided government, partisan bickering and voter apathy have all contributed to today's sausage making process that serves the interests of senators and representatives but lacks transparency for the American people.

Americans must demand change by contacting their elected representatives and senators.  Otherwise, Congressional members will continue on a track that surely will one day bankrupt the country and force extreme measures, including crippling taxes and Draconian budget cuts.

That day draws nearer each year that Congress refuses to tackle spending and the ballooning debt.

Four Trillion Reasons You Should Care

The federal government is on a trajectory to spend $4.1 trillion of your money this year.  The geyser of expenditures shatters another record for America.  Yet whenever talk turns to budget cuts, it triggers a volcanic eruption of outrage from special interests and the Washington political class.

Even a whisper of tampering with federal expenses churns up indignant protests. Any reduction will starve hungry children, sentence the poor to homeless shelters, deny medicine to the sick and force the elderly to eat dog food. It is a pathetically predictable response.  And it works every time.

But the truth is there are thousands of opportunities to trim the fat from the federal budget without harming kids, the poor, sick or seniors.  Your representatives in Washington know it. However, it is not the way the budget game is played.  More spending is always better for lawmakers.

The media is a willing accomplice in this theater of the absurd.  Every attempt to slice a tiny bit of waste is treated with headlines about the heartless actions of a few lawmakers who are out to punish a protected demographic group. The media shields unfettered spending through its biased reporting.

A simple illustration: The Congressional watchdog known as the Government Accountability Office (GAO) just published its 2018 annual report card on opportunities for eliminating waste and duplication.  The 120-page release packed with detailed figures was shunned by the media.

The extensive rundown chronicles more than 68 actions Congress and the executive branch can take to save billions.  But don't expect your representative to give a hoot.  The GAO has issued seven previous annual reports.  More than 40% of the recommendations have not been fully implemented.

In its most recent edition, the GAO highlights the fragmentation, overlap and duplication in the tangled web of federal agencies and departments that contributes to the waste.  As one example, the agency cites the 256 military Defense Distribution Centers scattered across the country.

These centers store and process goods for troop support, including everything from clothing to weapons.  By adopting a more efficient distribution system, the military could potentially reap a savings of $527 million over five years. Even in Washington, that's hardly chump change.

Defense is just one area ripe for reform.  The GAO also underscores ways to save millions in spending on agriculture, health, security, science, the environment and international affairs.  For instance, in education the agency uncovered massive duplication in the STEM program.

The federal program is designed to prepare students for careers in science, technology, engineering and mathematics.  Despite the admirable goal, the agency documented there are 163 programs and 13 different agencies involved in the effort.  The annual taxpayer tab for all this overlap is $2.9 billion.

The GAO isn't the only group that ferrets out wasteful spending.  Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit group dedicated to ending budget abuse, regularly exposes lawmakers' reckless spending on frivolous projects.

In its latest Pig Report, the organization spotlights the $10 million budget expenditure for high energy costs grants for Rural Utilities Service.  This program grew out of the depression in the 1930's and has met its original goal.  But Congress keeps funding it as a way to reward rural districts.

Another example is the $6 million price tag for the Delta Regional Authority, which provides economic development assistance to 252 counties in eight states.  It is duplicative of state, federal and local development projects, but it survives every year because the money goes to buy influence.

Those two projects are pikers compared to the $500 million cost of the Joint Strike Fighter aircraft for both the Navy and Marine Corps.  The program has been in development for nearly 16 years; it is six years behind schedule; and currently tips the scales at a hefty $170 billion over budget.

The GAO has consistently criticized the expenditures and noted that the lifetime operational and maintenance costs of these outlandishly expensive aircraft will total a whopping $1 trillion.  Despite the history of epic cost overruns, no one in Congress has succeeded in pulling the plug on funding.

There are a myriad of other illustrations of how lawmakers squander your tax dollars to purchase their reelection by kowtowing to special interests.  Those groups include environmentalists, weapons manufacturers, farm operators, the health industry and others who feed at the budget trough.

Nothing will ever change if the American public continues to be duped by the shrill voices of those who refuse to concede a single dollar in the federal budget.  The penalty for inaction is the incessant growth of the nation's debt, which now totals $19.8 trillion. Increased spending is unsustainable.

A good start would be ending the waste, duplication and outright fraud that vacuums up billions of tax dollars annually.  That savings would allow the budget to shrink without impacting critical programs.  Sounds like a good idea, right?  Then write your representative in Congress today.

Congress: Stop The Budget Madness

The Republican controlled Congress has shredded its promises of fiscal responsibility.  Spineless House and Senate members rubber stamped a stopgap spending bill last week that likely will tack on another $1 trillion to the already bloated national debt.  Conservatives are feeling betrayed.

The House struggled to pass a $1.3 trillion spending package in the wee hours after months of wrangling.  The 2,232-page appropriations bill was rushed to the Senate for approval, allowing legislators little opportunity to wade through the morass of appropriation items.

Many senators admit they did not read every page in the omnibus spending package before it was approved just after midnight. Democrats share in the blame for going along with the compromise, which included funding for many of their pet projects in exchange for votes.

What has not been widely reported is the $1.3 trillion represents a mere down payment on a two-year budget agreement.  The appropriation approved last week only funds the federal government through the current fiscal year, which ends September 30.  Then the drama will begin anew.

News coverage has failed to mention the gargantuan budget only addresses discretionary funding. It does NOT include entitlements, such as Medicaid, Medicare and Social Security.  There also is not one single dime in the budget for interest payments on the inflated national debt.

In bowing to pressure,  the GOP surrendered the high ground of fiscal conservatism. It has no one to blame but itself for the capitulation.  The party is a captive of Washington's chronically dysfunctional budget process.  However, Republicans have the power to fix it but they are cowards.

Almost 44 years ago, Congress approved the Budget Act of 1974 legally requiring members to pass an annual budget. After the president submits a budget proposal, the House and Senate are supposed to adopt their own budget resolutions and follow with spending bills to fund the fiscal plan.

Since the passage of the budget law, Congress has a abysmal record of adhering to its own appropriation deadlines.  Lawmakers have managed to meet their legal deadline just four times in four decades.  For the last six years, not a single appropriation has been enacted by the deadline.

This behavior encourages fiscal irresponsibility.  Senators and representatives are either too lazy, too incompetent or too disorganized to meet their goal.  There is no excuse for what passes as fiscal planning in Washington.  This is reckless chaos.  No business would operate this way.  

Americans have grown weary of the seemingly perpetual threat of a government shutdown as an excuse for abusing the federal budget process.  Members on both sides of the aisle wink at deadlines.  Their disregard for the process is deliberate and dishonest. 

The dirty little secret is that Congress prefers a frenetic pace.  In the final hours, members shoehorn pork barrel projects into the thousands of pages, hoping no one will notice until its too late.  Members votes are often exchanged for pet projects.  It's congressional bribery underwritten by taxpayers.

The midnight scramble also keeps the public from learning the details until the budget has been shoved across the finish line.  Members don't have to handle all those angry calls from constituents.  As soon as the gavel falls, members hotfoot it out of Washington for recess.

The charlatans refuse to face the music for their negligence.  When pressed, they blame the budget process. They blame the opposition party. None of that matters to Americans.  Members jobs are to fulfill their obligation to fund the nation's priorities in a timely, responsible manner.    

Representative Paul Mitchell of Michigan has joined some of his colleagues in demanding more accountability from Congress.  They have proposed a bill that requires Congress to pass a annual budget by June 30.  It's officially called the Protecting Our Children's Future Act (HR5214).

Under the bill's chief provision, if Congress fails to meet the budget deadline, members pay will be withheld. In other words, No Budget, No Pay.  Currently, there is no penalty for Representatives and Senators if they are derelict in their duty to enact appropriation bills on schedule.  

The measure would also streamline the process for passage of appropriations bills in the Senate, which often bogs down the budget process with archaic procedures.  Even when the House meets appropriation deadlines, the Senate drags its feet to force desperate short term measures.

In addition, the legislation would require zero-based budgeting.  Historically Congress uses baseline budgeting, which assumes the previous year's expenditures are the starting point. The new methodology would force the government to justify every dollar of spending each fiscal year.

Republicans hold the majority.  They have the ability to end the unscrupulous budget finagling in Washington.  They can clean up the swampy mess.  If Republicans won't keep their promise of fiscal responsibility, they deserve to be a minority party again. 

CBO: Too Often The Numbers Do Lie

Your local weather forecaster has better odds of being right than the Congressional Budget Office (CBO).  Despite its lousy prediction record, the media continues to tout the CBO's estimates as unimpeachable numbers not subject to skepticism.  Even a meterologist knows better. 

The budget office issues an annual deficit prediction 12-months ahead of the fiscal year, yet it errs by billions of dollars.  Its yearly economic growth models are just as inaccurate. CBO predicted 3.2 percent GDP from 2010-2016.  Actual GDP performance was 2.1 percent, a yawning disparity.

Notwithstanding its slipshod record, the CBO claims to be "strictly objective and impartial" in its role of producing 'independent' analysis of issues to support the Congressional budget process. Lawmakers are supposed to look to the CBO to provide the cost to taxpayers of proposed legislation.
 
From its beginning in 1975, the CBO has clung to antiquated scoring methodologies that skew the results and raise questions about the accuracy of its forecasts.  Like many government agencies, the CBO has resisted calls to change its calculus to fit today's economic realities. 

Many of the CBO's problems can be traced to its founding.  The creation of the CBO was a Democratic political ploy to wrest control of the budget process from the Office of Management and Budget (OMB) which reported to President Nixon at the time.

With lopsided majorities in the House and Senate, Democrats passed the Congressional Budget and Impoundment Control Act of 1974 birthing its own budget agency to weaken the OMB and to jigger cost estimates to fit its agenda.  Democrats named a director, who built a team of party loyalists. 

Since its infancy, the CBO has been the epitome of the Deep State, a reference to government employees who influence federal agency policies to reflect their own political views.  Even if the media uses the words "non-partisan" to describe the CBO, it serves its masters in Congress.

By its own admission, the CBO "consults" with members of Congress before it produces its estimates. Lawmakers can and do manipulate assumptions that the CBO bakes into its projections and forecasts on legislation. So much for an unbiased, nonpartisan estimate. 

Take the CBO's infamous forecast of the 10-year price tag of Obamacare.  Shilling for the proposal, President Obama vowed the legislation's price tag would be $940 billion. Magically, the CBO crunched the numbers and guesstimated the cost would be $938 billion.

That was in 2010.  Two years later the CBO did a "whoops" and restated its estimate.  In 2012, the ten-year cost had escalated to $1.76 trillion.  It turned out many of the original assumptions in the formal estimate were provided by one of Obamacare's architects, Jonathon Gruber.

When Republicans launched a legislative battle to repeal Obamacare this year, the CBO stepped in and effectively handed the Democrats a sledgehammer to smash the effort.  The CBO calculated 23 million people would lose health coverage in the insurance exchanges under the GOP plan.

The media used the figures to tar Republicans and scare Americans. No journalists bothered to look at the CBO assumptions. Agency bean-counters inflated the forecast for enrollment in Obamacare exchanges to make the losses appear larger than realistically expected over a 10-year horizon.   

With tax reform blinking on Washington's legislative radar, the CBO has dredged up findings that match the Democrat narrative of exploding deficits.  After examining the House and Senate tax plans, the CBO has projected 10-year deficits totalling $1.4 trillion and $1.7 trillion, respectively.

The same Democrats who applauded President Obama's $1 trillion budget deficit in a single year, are appalled and shocked at the estimated shortfall caused by tax reform.  However, the CBO's flawed analysis does not assume the reforms will fuel economic growth that will increase tax revenues.

The charade has lasted too long.

Virginia Representative Morgan Griffith and two of his colleagues recently offered legislation to abolish the Budget Analysis Division at the CBO.  "Too often predictions made by the CBO turn out to be far off the mark," Griffith told the House in pleading his case. 

Hidebound members of the House rebuffed the measure.  The swamp takes comfort in sustaining bureaucracies, particularly those that serve its purposes at the expense of taxpayers.

The CBO and its 250 analysts, economists and budget specialists have failed to publish accurate forecasts Congress can rely on in making decisions.  Axing the CBO will remove an obstacle to Washington reform. And it will have the added benefit of lowering the water level in the swamp.